Shipping vessel sharing pacts gets exemption from CCI ambit

The government has decided to exempt vessel sharing pacts among shipping companies from the purview of fair trade regulator Competition Commission of India (CCI).

 

However, the government has declined to provide similar exemption for voluntary discussions agreement among shipping industry players.

 

Vessel Sharing Agreement (VSA) and Voluntary Discussions Agreement (VDA) are common practices in the shipping industry. While VSA allows for entities to share space in each other's vessels, VDA provides for exchange of market information between the parties.

 

The shipping industry has been seeking exemption for these pacts from CCI, which keeps a tab on unfair trade practices at market place.

 

The Corporate Affairs Ministry has approved the VSA exemption, for a period of one year, after extensive consultations with the Commission, the Shipping Ministry as well as public stakeholders, a government official told PTI.

 

The exemption for VSA would be for a period of one year, which means that shipping industry entities will not have to seek approval from CCI during this period.

 

In September last year, the Ministry had exempted these two kinds of pacts from CCI purview for one year period.

 

According to the official, no exemption has been granted for VDA since such pacts could raise anti-competitive concerns in the market.

 

CCI comes under the administrative control of the Corporate Affairs Ministry.

 

During the exempted one-year period, the Directorate General of Shipping (DG-Shipping) would monitor implementation of VSAs.

 

The official said that further renewal of the exemption would be decided after joint review by DG-Shipping and CCI, where they would analyse whether such pacts have caused any appreciable adverse effect on competition.